Feb 12 Asian Macro Initial Thoughts Japan open other markets closed

12 Feb

Gong Xi Fa Cai or if you prefer Kung Hei Fat Choi for the Year of the Ox.

Asian Futures Nikkei Futures opened flat currently +15pts,  Australia sold down in early trades.  S Korea, Taiwan, China and Hong Kong closed

US Futures opened Dow -20pts, S&P and NDX both -0.1%

Singapore Airlines Ltd (SIA) yesterday began operating flights with full sets of crew members vaccinated against COVID-19 as the city-state seeks to rejuvenate its status as an international travel hub.  Comes as Cathay Pac cuts flights due to staff shortages from the latest HK quarantine requirements.

DOW -0.02%, NDX +0.38%, S&P +0.17%, Russel 2K +0.13% Market opened slightly higher on good pre market results although Initial claims missed. Markets trended lower in the AM session before working better in the afternoon to close around flat. S&P & Nasdaq set new highs.  
Energy was the laggard with technology the only sector to see gains.
Concerns over, re-opening, stimulus and inflation linger. Federal Budget forecast to be 2.3tn in 2021 down YoY but still exceptionally high and that is before the latest $1.9tn stimulus package. Volumes were high.
President Biden said China was poised to “eat our lunch,” a warning that tempered enthusiasm for a market near record highs. He told a group of U.S. senators in a meeting to discuss the need to upgrade U.S. infrastructure that the United States must raise its game in the face of the challenge from China.
FT reports The Biden administration has pledged to take immediate action to address a global shortage of semiconductors that has forced the closure of several US car plants. Jen Psaki, White House press secretary, said the administration was “identifying potential chokepoints in the supply chain” after coming under pressure from lawmakers, semiconductor companies and car manufacturers over the shortages.
US securities regulators suspended trading in a seemingly defunct company SpectraScience, a Minnesota healthcare company, whose shares had attracted the attention of investors over the past two months. The decision by the Securities and Exchange Commission comes as new and inexperienced retail traders have flooded into the country’s $45tn stock market, drawing scrutiny from policymakers in Washington.
Chinese demand for corn has surprised traders and driven grain prices higher. China bought a record 11.3m tonnes of corn last year, of which more than a third came from the US. In late January, the US Department of Agriculture announced that China had bought another 2.1m tonnes, the largest single sale to the country and the second-largest on record. In response, global corn prices have raced above $5 a bushel — a near eight-year high.
Pre market PepsiCo -2% reported beating beat estimates but closed the day lower. Uber -3.9% at the end of the day after it reported a smaller-than-expected loss its ride-hailing business is slowly recovered from the pandemic, while its delivery business boomed.
Other pre market earnings from Generac (GNRC) +13.7 as beat estimates on the top and bottom lines for its latest quarter, and said it expected net sales growth of 25 to 30 percent this year.
Restaurant Brands (QSR) -1.6%; the parent of Popeyes, Burger King and Tim Hortons earnings missed but revenue was slightly beat and comparable restaurant sales fell more than expected.
Tempur Sealy (TPX) +9.3% strong earnings and revenue beat and it said it expected 2021 sales growth of 15% to 20%.
Molson Coors (TAP) -9.2% as earnings missed were hurt by ongoing Covid-19 restrictions for restaurants and bars.
Kraft Heinz (KHC) +4.9% it beat estimates on the top and bottom lines for its latest quarter, and also announced the sale of its Planters snacks business to Hormel (HRL) for $3.35 billion in cash.
Sonos (SONO) +15.7% after it beat on both the top and bottom lines helped by stronger margins as no promotions were held during the quarter. It also raised its full-year revenue guidance.
iRobot (IRBT) +1.3 it beat on top and bottom line and gave strong full-year revenue and profit guidance.
Zillow Group (ZG) +16.7% it beat estimates by 14 cents with adjusted quarterly earnings of 41 cents per share, with the operator of real estate websites also scoring a revenue beat. It also gave upbeat revenue guidance, and announced the acquisition of online home-viewing-scheduling platform ShowingTime.com for $500 million in cash.
Zynga (ZNGA) +7.4% CEO Frank Gibeau told Barron’s that the mobile game developer is open to an acquisition offer, although it is not actively looking to sell the company. Zynga also reported a 61% jump in the key metric of net bookings during its latest quarter, more than analysts had anticipated
Banks JPMorgan Chase -0.2%, Citigroup -0.7%, Wells Fargo -1.5%, Amex flat
Work from home names: Facebook -0.5%, Apple -0.2%, Amazon -0.7%, Netflix -1%, Disney +0.7% ahead of earnings, Zoom Video +0.4%, Alphabet +0.1% and Microsoft +0.7% reportedly had approached Pinterest +7.3% but talks no longer active.,
Tech NXP Semi +3.3%, Nvidia +3.3%, Micron +5%, AMD +0.3%, Skyworks +1.9%
Re-opening stocks  Boeing -0.6%, Caterpillar +0.4%, Simon Property +2.9%, Kohl’s 1.1%, Nordstrom -1.3%, Gap +3.5%, United Airlines -0.8%, Carnival -1%, Wynn Resorts -1.6%, Chevron -0.5%, Exxon Mobil -2.5%,  
Lock down names Campbell Soup -1.2% General Mills -2%, JM Smucker -0.8%
Initial Claims 793k vs 812k prior (revised up) (F/cast was 750k)
Jobless Claims 4 week Average 823k vs 856.5k prior revised (F/cast was 813.75k)
Continuing Claims 4.545m vs 4.69m prior revised (F/cast was 4.451m)
EIA Natural Gas Stocks Change -171Bcf vs -192Bcf (Consensus was -181Bcf)
USD was flat vs Yen & weaker vs Euro. Bitcoin +5.2% @ 47,113.00, VIX -3.4% @ 21.25, US T10 @ 1.168%
OIL Brent -1%, WTI -1.2% ending a 9 day rising trend for Brent and 8 days for WTI but Brent still above $60
Gold -0.9%, Silver -0.2%, Copper +0.3% with platinum and palladium weak too.
AHEAD Michigan Prelim Data (Current Conditions, Inflation Expectations, Consumer Sentiment, 5 yr Inflation Expectations, Consumer Expectations) Baker Hughes Rigs Data.
Earnings Moody’s, Newell Brands, ING Grope

DAX +0.77%, CAC -0.02%, FTSE +0.07%  Markets opened slightly higher but has eased lower as traders again assess earnings with AstraZeneca, Credit Agricole, Commerzbank and Unicredit and cosmetics company L’Oreal were among the biggest names reporting before the bell, along with other like Arcelormittal, Schneider Electric and Zurich Insurance.Dax working higher but CAC and FTSE trading sideways around flat.AstraZeneca flat off initial high after reported product sales totaling $25.8 billion for 2020, a 10% rise from the previous year. Q4 sales rise +12% to just over $7 billion.
Credit Agricole +4.9% as it beat Q4r earnings expectations on the back of higher revenues and lower credit loss provisions.
Commerzbank -6% after issuing a weaker-than-expected 2021 revenue outlook.
Royal Mail +4.9% strong posted an upbeat outlook on the back of a stronger-than-expected holiday season.Rexel +6.8% strong after Q4 earnings
Unibail-Rodamco-Westfield -13% after the company suspended dividend payments for three years.
Saab -7.5% Q4 operating EBIT -36% YoYTed Baker -9% as Q4 revenue -47% YoY
Wholesale Prices Jan +2.1% MoM vs +0.6% Dec
Wholesale Prices Jan 0% YoY vs -1.2% Dec
IEA Oil Report
EUROZONE No data due
GERMANY No data due
FRANCE No data due
UK Balance of Trade, Construction Output & Orders, GDP, GDP Growth Rate, GDP 3 Month Average. Industrial Production, Manufacturing Production, Business Investment, Good Trade Balance, NIESR Monthly GDP Tracker.

JAPAN Nikkei futures opened flat currently +15pts  Market re-opens having closed at 30 year highs on Wednesday. Yen currently 104.72
Data due Foreign Bond Investment (prior was Yen 729.6b) and Foreign Stock  Investment (prior was -187.5b)
Current state of emergency will remain in place for 10 prefectures.
The Tokyo metropolitan government on Thursday reported 434 new covid cases (down 57 from Wednesday).  Nationwide cases were 1,695.
Health ministry is planning to move ahead with a formal approval of the coronavirus vaccine developed by U.S. pharmaceutical giant Pfizer Inc on Sunday, when the first batch of doses is scheduled to arrive in the country, sources familiar with the matter said Thursday.
Telcos may see weakness ahead of next months launch of new monthly plans that are cheaper than the current plans; which is likely to herald a new price war between NTT Docomo Inc., KDDI Corp. and SoftBank Corp as well as putting smaller network providers under pressure.
Toyota says it will roll out two new battery-electric vehicles and one plug-in gasoline-electric hybrid in the US this year; one electric vehicle would be a sports utility vehicle (SUV). Toyota said it has a goal of having 40 percent of its new vehicle sales be electrified by 2025 and nearly 70 percent by 2035. It is also developing dedicated underpinnings to be used in future electric vehicles.
Mori expected to resign as president of Tokyo Games organizing committee, expected to happen on Friday. Comes after his inappropriate comments about women.Virus threatens 'game over' for Japan's arcades. Press reports many are closing down as they close early but do not receive compensation for loss of income  -VE for landlords but +VE for Nintendo, Sony etc as people opt to play at home.

SOUTH KOREA Closed re-opens Monday 
No data due
KDCA reported 504 new covid cases Thursday (vs 444 Wednesday);  rising above 500 to a 15 day high. Authorities on high alert about a possible surge over the lunar new year holiday
LG Energy Solution threatens further legal action against SK Innovation after victory in US.  It may now take action in Europe and S Korea.  SK Innovation was slapped with a 10-year ban on importing lithium-ion battery products to the US, with a grace period of up to four years, for stealing trade secrets from LG Energy Solution. A  major set back for SK Innovation and its US investments.  Much will now depend on negotiations between the two for a financial settlement or SK Innovation finding a way (like a JV or manufacturing on the basis of new tech) to avoid the ban.  Short term the news is -VE
Ford Motor CEO  on Thursday publicly encouraged  LG Chem Ltd and SK Innovation Co Ltd to reach a settlement on LG’s battery allegations that SK stole trade secrets. He tweeted “A voluntary settlement between these two suppliers is ultimately in the best interest of US manufacturers and workers,” Farley wrote on Twitter, adding that “ITC ruling makes way for @Ford to bring to market our groundbreaking electric F-150.”
LG Household & Health Care manages to pull ahead of Amorepacific on the basis of sales for the first time.  Together they account for over 60 percent of the market as of end-2019. LG Households expansion in China tipping the balance in its favour.  +VE as demand for everyday necessities out paces cosmetics.
February this year is expected to be another busy month for the South Korean stock market as a large number of companies seeking to launch initial public offerings on retail investors’ strong appetite for direct investments, according to the investment banking sources. 12 firms are scheduled to float their shares on the stock market or hold retail subscriptions. Compares with 7 firms in January.  Reflects the high amount of liquidity, with retail deposits at brokers doubling YoY and cash in management accounts +20% YoY.

TAIWAN Closed re-opens 17 February
No data due 
Hsiao and a senior US State Dept official of the Biden administration hold first public meeting ‘DEEPENING TIES’: The State Department posted a photo of the meeting on Twitter and described Taiwan as a vital security and economic partner. Its public announcement could be indicative of continuing high-level contacts with Taiwan under US President Joe Biden’s administration.  Likely to annoy Beijing who views Taiwan as a domestic issue but I think it will need to give up that view due to international pressure.

CHINA Closed re-opens 18 February 
No data due
A total of 18.88 million passengers traveled in China on Wednesday, one day before Chinese New Year's Eve, by railway, road, waterway and civil aviation. This was  down by 77.3 percent from the same period in 2020, state media reports.  -VE for Airlines and Railways.
China orders Deloitte to investigate whistleblower allegations
Report circulated on social media claims firm carried out serious violations related to audits. Ministry of Finance asked the firm to conduct earnest self-investigation. The MOF will strengthen cooperation with relevant regulatory authorities for strict inspections on relevant reporting matters, adhere to "zero tolerance" principle and deal with it seriously in accordance with laws and regulations, in case of any verified violations.
BBC World News was barred on Friday from airing in China, a week after Britain’s media regulator revoked Chinese state television’s licence to broadcast in the United Kingdom. China’s National Radio and Television Administration said an investigation found BBC World News’ China-related reports had “seriously violated” regulations, including that news should be “truthful and fair,” had harmed the country’s national interests and undermined national unity.  -VE Mexico received its biggest COVID-19 vaccine shipment yet on Thursday, in the form of the active ingredient for 2 million doses of China’s CanSino shot, a relief for the Latin American country after slow delivery on orders from Western companies. Foreign Minister Marcelo Ebrard recognized China’s support and thanked CanSino Biologics Inc for the “timely shipment” in a tweet.  +VE CanSino
Bolivia said on Thursday it had inked an agreement with China´s Sinopharm locking in an initial supply of half a million doses of the company´s vaccine against coronavirus by the end of February. +VE Sinopharm
Zimbabwe has purchased 600,000 COVID-19 vaccine doses from China's Sinopharm, in addition to 200,000 China has donated, its information minister said on Wednesday, adding these were due to arrive in Zimbabwe by the start of March. +VE Sinopharm
India and China on Thursday began to pull back troops and battle tanks from a bitterly contested lake area high in the western Himalayas on Thursday in a breakthrough after a months-long standoff on the disputed border. +VE for sentiment.
Jailed Chinese lawyer Yu Wensheng wins international human rights award.  He was arrested in January 2018, a day after publishing an open letter calling for reforms. He is serving a four-year sentence announced in June 2020 after being convicted at a secret trial of “inciting subversion”.

HONG KONG  ADR’s closed in the US +170pts mainly +VE but weakness in Chinese Financials, Baba, Sinopec and Cheung Kong.  Market closed re-opens Tuesday
No data due
Thursday HK reported 21 new covid cases (vs 17 on Wednesday) 7 from unknown origin along with 10 preliminary positive cases
SHORT SELLING Thursday 23.6% vs 16.2% Wednesday 
Top Shorts:   Hengan (1044) 39%, China Res Land (1109) 39%, AAC Tech (2018) 38%, Bank of China (3988) 38%, SHKP (16) 38%, BABA-SW (9988) 38%, Shenzhou (2313) 37%, Country Garden (2007) 33%, Hang Seng Bank (11) 32%, Hang Lung Ppty  (101) 32%, AIA (1299) 32%, BankComm (3328) 32%, Bud Apac (1876) 32%, Anta (2020) 31%, CCB (939) 31%, Ping An (2318) 29%, Meituan (3690) 28%, Sino Biopharm (1177) 28%, CITIC (267) 27%, Sunny Optical (2382) 27%, Galaxy Ent (27) 27%,  CLP (2) 25%, Henderson Land (12) 25%, HSBC (5) 25%.
Cathay Pacific to severely cut its already slim flight schedules from next weekend, following the Hong Kong government’s decision to impose mandatory quarantine requirements on aircrews returning from overseas destinations.  According to reports, the carrier will completely cut long-haul flights to and from Brisbane, Perth, Melbourne, Auckland, Frankfurt, Vancouver, San Francisco and Amsterdam.  While the long-haul flights that survive the axe include Sydney, Los Angeles, New York, Toronto, London and Amsterdam.  Regional routes were also affected, flights to and from Kuala Lumpur, Ho Chi Minh and Seoul were cut -VE
HNA TECH INV (02086.HK) announced that Bank of Hainan, a creditor of HNA Group (an indirect controlling shareholder of the company), filed to Hainan High People’s Court for a reorganisation petition against HNA Group. On 10 February 2021, the Court issued a civil ruling letter, accepting the Reorganisation Petition. The Company underscored it is independent from HNA Group in respect of business, assets, institutions and finance, and will endeavour to ensure the stability in its operation and management. The commencement of reorganisation procedure of HNA Group may have an impact on the shareholding structure of the Company. The Company will closely follow the development of the aforesaid matters.
Tender for a site, New Kowloon Inland Lot No. 6604 at Kai Tak Area 4E Site 2, has been closed at noon today (11 February). According to on-site observation, the government has received at least five tenders, including those from CK ASSET (01113.HK), SINO LAND (00083.HK) and K. WAH INT'L (00173.HK).
Tencent exec Zhang Feng arrested for corruption Citing people familiar with the matter, Zhang Feng has been under investigation by China's anti-graft inspector since last year for alleged unauthorized sharing of personal data collected by Tencent's social-media app WeChat.  "We can confirm that case relates to allegations of personal corruption and has no relation to Weixin or WeChat," Tencent said in a statement to Reuters.

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